Trading in dot-com for dot-anythingyouwant

But many businesses see no upside in new domain name rollout

When Internet protocol was established in 1985, just six top-level domain names were available. By 2011, when dot-xxx was added, the options had increased to almost two dozen in the U.S. Next week, the non-profit organization responsible for managing and coordinating the Internet's address system will take a leap to make the possibilities infinite.

Well, that's the plan. What seems likely, in the short run at least, is that businesses will pass on the chance to create their own unique domain names; today's choices, many say, are more than enough.

Launching what could be called the vanity plate era of the web, the Marina del Rey, Calif.-based Internet Corp. for Assigned Names and Numbers will accept applications starting Jan. 12 for new generic top-level domains—that is, everything to the right of the dot. This means that instead of tagging themselves dot-com, dot-net or any of the other existing domains, site owners can apply for dot-anydomaintheywant, provided they have enough dough to cover the application fee.

The expansion is opposed by federal officials, non-profits and many of the nation's largest corporations—including Allstate Corp., Kraft Foods Inc. and MillerCoors LLC—which have joined forces with the New York-based Assn. of National Advertisers to form the Coalition for Responsible Internet Domain Oversight to try to stop the new name game.

“It is extraordinary to believe that this is going to lead to a good result for anybody,” says Dan Jaffe, ANA's executive vice-president of government relations. “Look how powerful these (business) groups are and how strong they are financially. If they are starting to say this is going to adversely impact them, just think what this means for smaller businesses or even medium-size businesses facing the same types of problems.”

Critics' biggest worries about the multiplicity of domains fall into three general areas: necessity, security and cost.

Mr. Jaffe and others say there's no widespread demand for or clear benefit from the domains. Additionally, opponents say, by increasing the total number of U.S. domains from 22 to whatever the market demands, ICANN is opening the door to more typosquatting (using a domain name that is a variation of a popular domain name), cybersquatting (registering a web address, usually a company name, with the intent to sell it) and phishing (purporting to be a legitimate enterprise to get people to hand over private information), which already present a threat to consumers.

Then there's the cost: $185,000 to apply for a domain and $25,000 per year to maintain it. By comparison, the median price for a second-level domain—everything to the left of the dot—was $624 in the third quarter, according to a recent report by Cambridge, Mass.-based Sedo Holding Group, a global domain name marketplace.

“Some have estimated that for a typical company, the cost of acquiring a single new, generic, top-level domain and managing it could easily exceed $2 million,” Mr. Jaffe told the Senate Commerce Committee at a hearing last month. “As many companies have hundreds or even thousands of brands to defend, it's easy to see how these costs will spiral upward.”

It's this idea of defensive registration—that is, securing every possible domain that could be associated with an organization or brand, as some universities did with dot-xxx—that could force companies and non-profits into paying for and monitoring new top-level domains, even if they have no desire to use them.

“Our name and reputation (are) priceless, yet these additional costs to protect them are now out of financial reach,” Angela Williams, senior vice-president and general counsel of Chicago-based YMCA, said during the Senate hearing. “There is no doubt it will have a crippling effect upon my organization.”

NO PROBLEM?

ICANN officials insist the domain expansion, which has been in the works for nearly six years, will not be as problematic as critics contend.

Nonetheless, Northfield-based Kraft has come out against the virtual land rush.

“The ICANN proposal could have serious implications for many companies across different industries,” a spokes-woman says in an email. “We agree with the ANA and others that we need more time to better understand how the current plan would benefit our brands and ultimately consumers.”

While they are also members of the maintain-the-status-quo coalition, Northbrook-based Allstate declines to comment and Chicago-based MillerCoors couldn't be reached.

Other big Illinois companies, including Boeing Co., Archer Daniels Midland Co. and Sears Holdings Corp., would not specify what, if anything, they plan to do when given the chance to secure their own domains.

Sean Kegelman, senior vice-president of partnerships and ventures at Publicis Groupe's VivaKi, a Chicago-based digital media firm, says that unpopularity of other domain tags—dot-museum and dot-aero have been available for the past decade—is a harbinger of how new ones probably will fare.